StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Social Responsibility of Business - Essay Example

Summary
This paper "Social Responsibility of Business" evaluates the argument on the core responsibility of business based on Milton Friedman’s View. Traditional and environmental accounting is important if corporations are to have the capacity to satisfy accountability relationships with stakeholders…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER98.9% of users find it useful
Social Responsibility of Business
Read Text Preview

Extract of sample "Social Responsibility of Business"

The Social Responsibility of Business al affiliation: Issue One of the man s of business entities is to make huge profits within the shortest time possible. This secretive agenda will continue to be hidden from the public. This paper aims at evaluating the argument on the core responsibility of business based on Milton Friedman’s View. Argument, premises and conclusion Milton Friedman’s View on the Accountability and stakeholders is that managers of corporations will always quote that they do not merely dwell on profit making but embark on lifting and promoting the living standards of the general society. The truth is that these corporates, for a long period of time, have undermined the bases of a free society. This is because business as a corporation can never have a responsibility. It is only people who have responsibilities. Friedman intimates that managers in their capacity as corporate executives have a main agenda that is to represent the interests of the business owners, which presumably will be “to make profit.” In cases where the owners of the business came together for a charitable purpose, for example a hospital, the primary obligation of the executive manager will not be to make profits but render services in the best way possible that will satisfy the customer/consumer. Either for making profits or rendering services the best way possible, the executive sole responsibility of a business is to be loyal to the owners of the business. It must be understood that the executive may be running a number of charity works. For example, he/she may be involved in the funding of the local church or club, or refuse to work for certain companies. According to Friedman, the manager in this respect is acting as a principal and therefore these tenets will be his own responsibilities, not those of the corporation. In cases where a business entity increases product/ services prices in a bid to contribute to the social responsibility ascribed to preventing inflation, it would be in the best interests of the business. Even when the corporate make expendi­tures on reducing pollution, to an amount that the corporation finds favorable, or is obligates by law to espouse the social goal of improving environmental conditions. In every one of these cases, the corporate exec­utive would be using up a different entity’s resources to satisfy general interest ascribed to society, starting from reducing the returns of the stockholders, raising the price of products to customers, and when he lowers the wages of some employees. Conclusively, corporations will need to take a different step and think of mechanisms that will be involving more than just the stockholders in the decision making process. Although a stakeholder theory exists, it would be important for the corporation to think in light of a broader perspective that will stop the notion of operating as a corporation. Traditional accounting may need to be reformed through the technology of social and environmental accounting to make corporations more accountable to the community. Environmental accounting can be an important too if at all corporations are to have the capacity satisfy the accountability relationships with stakeholders and if it is to change the consciousness of corporations. Evaluation of the Argument Based the argument ascribed to the above-mentioned instances, the executive is imposing a distinctive responsibility instead of serving as a representative of the stockholders along with the employees and the customers, by not spending the money in a different way than they would have spent it. This clearly shows that the businessman is taking more and very critical roles without minding the employees or the customers. He decides whom to tax by how much and for what purpose, and how to spend the returns and all this guided only by general appeals like to restrain inflation (Larsen, 2004). It would be wise if the corporate imposes taxes and makes expendi­tures to foster "social" objectives by setting up a mechanism that will have the mandate to make the as­sessment of taxes and to determine through a political process the objectives to be served. In addition, in instances where the executive responsibility raises lots of questions or doubts then there should a legal framework enabling the corporate customers and employees to desert the business entity for exercising their so­cial responsibilities (Larsen, 2004). The same case ap­plies to the newer trend of calling upon stakeholders to require corporations to exercise social responsibility. When the stakeholders play foul by trying to get other stockholders to contribute against their will then the same legal process should be exercised on them. This is because when they succeed, they again impose taxes on consumers and spend the proceeds. When the individual proprietor imposes costs on employees and customers, the same law should also apply to him even though he is far less likely than a large corporation or union to have mo­nopolistic power. Summative, it would be apt to intimate that a business ought to concentrate on devoting their resources to services ascribed to small communities or improve its authority. This may reduce effects on the consumer, suppliers or the employee. This task requires the embodiment of communitarian principles in the working of every organization in the economy, both in the private and public sector. People will need plenty of teaching-from family, employers and school or from their daily experiences of life if they are to think more practically and with moral principles. When these individuals learn or decide that some things are good and some are bad, and thereafter see them as bad or good, their disposition to recognize things in that way will become their characters (Besnard & Hunter, 2008). It also emerges that corporations may have more than just the responsibility to increase profits, and must consider the environment and community at large. This may require that executive and partly shareholders witch from being profit-oriented and become more considerate of others. For the community at large (including corporations) to be moral, they may need to be educated by institutions, friends and families around them. Deductive component The argument contains a deductive component and is valid and absolutely factual. This is because the argument does not only highlight instances where by the Consumers have been deprived of their incomes by corporations but also goes ahead to highlight the process by which they are deprived. Inductive Component The argument has an inductive component and is valid. This because in cases where a business entity increases product/ service prices in the hope of contributing to the corporate social responsibility tied to preventing inflation, it would be in the best interests of the business, even when the corporate makes expendi­tures on ameliorating pollution to a level that the cor­poration sees fit or that the law may require the corporation to espouse the social object of improving the condition of environment. In every one of these cases, the corporate exec­utive would be consuming stakeholders’’ resources to oversee a common social interest. Starting from reducing the returns of the stockholders, raising the price of and lowering the wages of some employees. References Besnard, P., & Hunter, A. (2008). Elements of argumentation. Cambridge, Mass.: MIT Press. Budgen, R. (2010). Critical thinking for students: Learn the skills of analysing, evaluating and producing arguments (4th ed.). Oxford: How To Books. Larsen, L. (2004). Responsibility in world business managing harmful side-effects of corporate activity. Tokyo: United Nations University Press. Walton, D., & Reed, C. (2008). Argumentation schemes. Cambridge: Cambridge University Press. Read More

CHECK THESE SAMPLES OF Social Responsibility of Business

Re-evaluating Milton Friedmans Concept of Social Responsibility of Business

"Re-evaluating Milton Friedman's Concept of Social Responsibility of Business" paper defines the concept of free competition and business ethics in the light of research works of previous research scholars.... It is evident from the above discussion that the concept of Milton Friedman about the responsibility of business is still relevant in context to banking industry.... The study understands the role of business ethics in the context of the banking industry....
12 Pages (3000 words) Essay

The Social Responsibility of Business

He maintains that the responsibility of a corporate executive who is employed by the owners of the business is to run the business profitably in accordance with the law.... This essay aims to analyze the recent trend, in which many people, organizations and groups are of the belief that businesses have some social responsibility towards all its stakeholders, which consists of not only its employees, but also the customers and the environment.... This essay analyzes the view, in which business have social responsibility seems justified as the operations and the business of an organization is affecting the environment at large....
3 Pages (750 words) Essay

Is Increasing Profits the Only Social Responsibility of Business

"A Friedman doctrine: The Social Responsibility of Business is to increase its profits," The New York Times Magazine, (September 13, 1970).... This paper will respond to the critical letter commenting on the opposing views presented by Friedman on one hand, and social responsibility of a Business social responsibility of a Business A business' social responsibilities define both the economic and ethical duties it is obliged to perform in order to contribute towards, and uphold, the balance between the ecosystem and economy while promoting its workers' and customers' quality of life (Wayne, Matten, Pohl & Tolhurst, 2007)....
2 Pages (500 words) Assignment

What is the social responsibility of business

Maximizing profits contributes to social responsibility by creating jobs, offering quality products among others but it does not guarantee commitment to the community.... A business has a social responsibility to its shareholders to make profits but also has a duty to its stakeholders including customers, employees, suppliers, and This is because all the stakeholders play a great role in defining the role of the business regarding its needs and desires, which go a long way in building its growth (Wight and Morton 155)....
4 Pages (1000 words) Essay

Friedman and the Social Responsibility of Business

This essay "Friedman and the Social Responsibility of Business" discusses Milton Friedman that made one of the most controversial statements in the New York Times in the 1970s by asserting that the major role of businesses is to generate profits for the shareholders (Makower, 2006).... There are those that argue that this argument is demeaning to the role of business in society.... It remains a basis of contention for companies in the modern world on whether sustainable business and corporate social responsibility are a distraction to the sole purpose of which is to act in the best interest of the shareholders....
2 Pages (500 words) Essay

Social Responsibility of Business Corporations

The paper "Social Responsibility of Business Corporations" states law, morality, and social responsibility are the main values that guide business organizations.... The funding of the political campaigns by corporations is a controversial issue; some people are of the idea that the funding of the political campaigns by politicians is in line with the law, the ethics, and the Social Responsibility of Business organizations, while other people are of the idea that the funding of the political campaigns by corporations is against the law, the ethics, and the social responsibility guiding business organizations....
19 Pages (4750 words) Term Paper

The Social Responsibility of Business

"The Social Responsibility of Business" paper seeks to critically analyze this concept of Social Responsibility of Business in view of Milton Friedman's article titled 'The Social Responsibility of Business is to increase its profits,' published in The New York Times Magazine on September 30, 1970.... However, there are other groups of people that believe that profit maximization should be the core responsibility of business in a free market economy system....
4 Pages (1000 words) Essay

The Social Responsibility of Business: Friedman vs Drucker

In the paper 'The Social Responsibility of Business: Friedman vs Drucker' the author analyzes the article by Milton Friedman who argues that businesses were to engage in socially responsible activities it would be equivalent to practicing socialism.... Friedman argues that the only responsibility of a business is to make a profit for its various stakeholders.... riedman argues that the only responsibility of a business is to make a profit for its various stakeholders....
4 Pages (1000 words) Book Report/Review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us